Sharp - Comments from the Japanese CEO

This is another important article that reports criticisms towards the government from leading Japanese corporations:

Osawa, Juro, 2010. Sharp blasts tokyo on yen, taxes. The Wall Street Journal, Sept. 18.

This follows comments about the strength of the Yen by the CEO of Hitachi. However, the comments go further in asking for subsidies, something that the debt heavy Japanese government is not in a position to deliver.

These type of statements are uncommon in Japan. There appears to be distrust of China's intentions in purchasing the Yen along with rivalry with Korean electronics companies who are making inroads in the global industry. The currency issue has driven a wedge between all three countries in East Asia and perhaps has created the most tense relations in years.

What I find concerning is the entitlement attitude of exporting countries. By choice, these countries, namely China, Japan, and Germany choose to structure their economies around exports to achieve quicker economic growth. Now that that the US Dollar has weakened, exporting countries can not accept the anticipated shift in trade patterns that naturally occur.

In theory, a free market for currency is the best way to allocate global resources. For awhile, governments have respected this proven economic principle. However, recent political pressure in exporting countries has led to a reluctance to accept free market currency principles. There is nothing but economic downside for the global economy if this policy approach continues.

The above article also has an interesting note about prospects for the US economy:

"Mr. Katayama's worries are also due to growing uncertainties over the world economy, especially in North America and Europe. 'I think the North American market is cooling down severely,' he said, adding that this year's holiday shopping season toward the end of the year will be 'really tough.'"

Cooling down indeed!